Q12023: The 20 Most Profitable Companies in the World
The survival and development of a company are based on profitability as the primary condition. There are two important indicators to understand profitability.
The first is gross margin.
Gross margin is a direct reflection of the relationship between a company's selling price and its cost of sales, and does not take into account other factors that may affect profitability, so this indicator is a more intuitive reflection of the competitiveness of the company's products.
The second one is EBITDA.
EBIT is used to measure the profitability of a company's main business, while EBITDA is used to measure the ability of a company to generate cash flow from its main business. More and more investors are focusing on EBIT and EBITDA instead of net income because it is simply a measure of net income, while EBITDA is more reflective of a company's profitability because it includes income taxes, interest, and depreciation and amortization expenses.
Due to the product attributes of the different industries, the most profitable industries in terms of EBITDA alone are energy and real estate. Therefore, here are the 20 most profitable companies over 10B according to GICS.
Consumer Discretionary
$MGM Resorts International(MGM)$ $McDonald's(MCD)$ $Booking Holdings(BKNG)$ $Yum(YUM)$ $Caesars Entertainment(CZR)$
Communication Services
$Charter(CHTR)$ $T-Mobile US(TMUS)$ $Verizon(VZ)$ $Sirius XM(SIRI)$ $Alphabet(GOOGL)$
Information Technology
$VeriSign(VRSN)$ $Broadcom(AVGO)$ $GEN DIGITAL INC(GEN)$ $ASML Holding NV(ASML)$ $Analog Devices(ADI)$
As an investor, what are the most important metrics you look for in a company's financial condition?
what metrics do you look at when evaluating how profitable a company is?
How do you determine whether a company is profitable or has the potential to be profitable?
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$Caesars Entertainment(CZR)$ the pnl negative as show in $Tiger Brokers(TIGR)$ apps, so why is it the most profitable in the world 😱 how i see the company is profitable? i check tiger apps and also compare peer to peer. The apps also provide trendline and foreard PE, is all generated by AI ? 😱
1. Revenue - consistent revenue growth across the last 5-10 years
2. Net income - must be profitable and exhibit continual growth in profits
3. Operating Cash Flow - must generate positive cash flow in order to re-invest for growth and share buybacks or distribution of dividends
4. Debt to Equity Ratio - Low ratio on balance sheet indicates less dependency on debt which can be risky in a high interest or recessionary environment.
There are several ways to evaluate profitablity, which includes:
1. Gross Margin - determined based on revenue less Cost of Goods Sold (COGS). This is an indicator of how well a company can price its products or services / economic moat
2. Net Margin - determined based on revenue less COGS and taxes. This shows the level of financial management and health of profits.
Happy to hear your approach! [Grin]
1. Revenue growth
2. Gross margin changes
3. Net profit growth
4. EPS
And oftenly it's good to refer to the company prospect or incoming forecast / estimation to foresee the growth.
as for the cash flow, I prefer to look forward to a positive cash flow and there's no a large amount of unpaid loan to some creditors or an unpaid receivable account that is owed by the customers (usually marked by the delayed payment of 90 days or more).
how's yours @Viv22 @LMSunshine @KYHBKO @Tigress02 @Universe宇宙 @kungpao @wine18 @cindyft @Xian789 @MTok
Got.to.love $Broadcom(AVGO)$
1. ROIC to compare the profit on your invested capital
2. DER to see the structure of the leverage of the company and the weight of the loan payment to its operational profit
3. cashflow, mainly CFO, to see whether the sales generate enough fresh fund for operational, instead becoming bad receivable which is never paid by the buyer.
I'm just searching for all of these factors of the company and its peers.
it's relatively easy to see whether the company is profitable or not. these factors can reveals it. as for to judge the potential of being profitable in the future, it's quite difficult. however, one thing that covid era has shown is the influx of fund from angel investor(s) due to the fact that analysts from the angle investors can see its potential. at least, these fresh funds can ensure the operationsl of the company for some time so that your capital won't lost in that time window.
最好的计算方法是税前利润率。
look at their income statement, balance sheet and cash flow statement.
pe ratio, debt to equity ratios are important.
alot depends on where you are a value investor. a company can look cheap on a pe ratio but there may be fundamental issues with the company.
why I think looking at the financial statements are more important than ratios.